Customs, Excise and Gold Tribunal - Tamil Nadu
Capital Match Co. vs Collector Of C. Ex. on 18 March, 1988
Equivalent citations: 1988(17)ECC211, 1988(18)ECR417(TRI.-CHENNAI), 1988(37)ELT383(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. The above appeals are directed against the common order of the Collector of Central Excise, Madurai, dated 29-3-87 appropriating a sum of Rs. 13.000 In lieu of confiscation of 1764 match bundles seized from appellant M/s. Capital Match Co., besides a penalty of Rs. 2,000 under rule 231 of the Central Excise Rules, hereinafter referred to as the 'Rules', and demanding excise duty from the other two appellants at the Tariff rate and Imposing on each of the other appellants a sum of Rs. 1,000 as penalty under Rule 210 of the Rules.
2. The Preventive Officer of the Central Excise Department at Kovilpatti Division checked the matches found in the possession of appellant M/s. Capital Match Co. at New Road, Kovilpatti, on 2-11 -85 and effected seizure of matches manufactured by the other appellants and others, with which I am not concerned in the present appeals, under a maz-har as per law. The authorities effected seizure of the matches because the match boxes did not contain 50 sticks in terms of Rule 63 of the Rules. The seized match boxes were provisionally released to M/s. Capital Match Co. on a cash security of Rs. 13,000 and as the match bundles so provisionally released had not been made available at the time of adjudication, the cash security was appropirated against M/s. Capital Match Co. under the impugned order. The other appellants were enjoying the benefit of the concession in regard to payment of duty in terms of Notification No. 22/1982 dated 23-2-1982 as amended. Since the concessional notification referred to above is applicable only to boxes of 50 matches each and as the match boxes contained less than 50 sticks, the adjudicating authority under the impugned order denied the other two appellants the benefit of the concession under the said Notification and directed them to pay duty under the Tariff rate besides penalty.
3. Shri Chellapandian, the learned counsel for the appellants, submitted that admittedly even according to the adjudicating authority, as found in the first para of the impugned order, appellant Capital Match Co. is only a commission agent and is neither a manufacturer nor a dealer nor a retailer. Therefore, being a broker this appellant is not liable for any duty or penalty and imposition of penalty under Rule 231 is not correct in law. Regarding the other appellants, the learned counsel contended that once the matches have been cleared on payment of duty the goods being under physical control, the authorities would not have jurisdiction to effect seizure of the same at a later point of time and more so to levy duty at a higher rate. The learned counsel also assailed the legality of the penalty imposed on them.
4. Heard Shri Bhatia, the learned Senior D.R.
5. I have carefully considered the submissions made before me. Appellant M/s. Capital Match Co., according to the impuged order, is engaged in match trade on "consignment sales on commission basis". The charge is that this was in contravention of Rule 231 of the Rules. Rule 231 states that matches found in the possession of any dealer or retailer (emphasis supplied) not being stamped, wrapped or labelled as prescribed or the container bears any other mark or appearance of having been opened or tampered with shall be liable to confiscation and such dealer or retailer shall be liable to a penalty which may extend to Rs. 1.000/-. In the present case, even according to the adjudicating authority, appellant Capital March Co. is only a broker and there is no whisper of an allegation that this company is either a dealer or a retailer. Therefore,' Rule 231 will not have any application so far as this appellant is concerned. Incidentally, I may also point out that the maximum penalty provided for under Rule 231 is only Rs. 1,000 whereas under the Impugned order for contravention of Rule 231 the adjudicating authority has imposed a penalty of Rs. 2.000/-. Since M/s. Capital Match Co. is neither a dealer nor a retailer within the meaning of Rule 231 and since there is no allegation of any kind even in the show cause notice that there was either tampering with the wrapper or label or that the same was in any way cut or torn. Rule 231 has no application and in this view of the matter I set aside the penalty imposed on the appellant M/s. Capital Match Co. by the Collector. In regard to appropriation of a sum of Rs. 13,000 on the ground that the goods, which were provisionally released, were not made avialable at the time of adjudication though strictly speaking it would not form part of the adjudication and appealable before the Tribunal, taking into consideration that appellant M/s. Capital Match Co. is only a commission agent or a broker for a petty monetary gain, I am inclined to hold that interests of justice would be met if the amount appropriated is reduced from Rs. 13,000 to Rs. 5,000 (Rs. Five thousand) and I order accordingly.
6. In respect of the two other appellants it is not disputed before me that the match boxes contained less than 50 matches and, therefore, the concessional benefit in terms of Notification 22/82, referred to supra, is not applicable. It is settled proposition of law that in the matter of construction of an exemption notification there is no scope for intendment and a literal construction will have to be adopted. The concessional notification not being applicable to the other two appellants in the aforesaid circumstances the order of the Collector in demanding duty at the Tariff rate is sustainable in law. I, therefore, confirm this finding of the Collector under the impugned order. Since the other appellants are said to have not contravented any provisions of law at any time in the past and the units being cottage units, I am inclined to hold that interests of justice would be met if some leniency Is shown in respect of the quantum of penalty and in this view of the matter I reduce the penalty on each of the appellants from Rs. 1,000 to Rs. 250/-.
7. In the result Excise Appeal No. 471/87 is allowed and the other two appeals are dismissed with modifications.